Waterford school, Swaziland, in 1967. Eighty-six nationalities have studied at the institution since its launch in 1963

Russell Palmer, a journalist from South Africa, described it as like landing on another planet, a feeling of having suddenly arrived in an environment so different from what he has known that there is overwhelming bewilderment. The place was Waterford school, just 14 miles across the border in Swaziland, but a brave new world in its attitude to race.

The first multiracial school in southern Africa was born in direct opposition to the apartheid regime, which branded it "sick" and "unnatural", and became a haven for the children of struggle leaders such as Nelson Mandela, Walter Sisulu and Desmond Tutu. On Saturday it celebrated its 50th anniversary with colourful parades, performances and reflections on its courageous role in the continent's history.

"We were here during the era of apartheid and this school was an absolute beacon of what was to come," former student Amanda West, a last-minute replacement for Tutu as guest speaker after he withdrew due to illness, told a gathering of alumni, donors and teachers past and present. "As a student population we were wildly involved in the politics … This is an astounding place."

Eighty-six nationalities have studied there over the years and most were represented in a sports field parade featuring students in national dress and speaking national languages. Although it ran the gamut from Angola to Zimbabwe, the biggest cheer was reserved for the Swazi delegation.

Then came a series of cultural performances including ballroom, hip-hip and traditional Swazi dancing along with martial artists chopping a plank of wood and a finale symbolising how Waterford rose like a phoenix from the ashes of school closures in South Africa. Students ran food stalls selling everything from Mozambican prawns to American chocolate chip cookies and staged a debate on African leadership in the school hall.

Michael Stern, Waterford's founding headteacher, who died in 2002

For West, 50, who works in marketing and lives near Tunbridge Wells in Kent, it was a moving spectacle. She was last here in the seventies shortly after events such as the Soweto uprising and murder of Steve Biko. "It's no exaggeration to say the student diaspora was on top of and absorbed in every political event happening in South Africa."

On one occasion, she recalled, two students locked themselves in a broom cupboard for a weekend to understand the plight of political prisoners in solitary confinement. Another student, Susan Westcott, later joined the African National Congress's armed struggle and was imprisoned for terrorism. Tutu came to speak at school assemblies.

Among West's friends was Zindzi Mandela, one of two of Nelson Mandela's daughters to attend. "Sometimes Zindzi would be able to get home, other times not because she couldn't get over the border," she said. "She was very lively and a very strong individual. There were really big moments where she would go to see her dad."

The seed of this "South African school in exile" was planted by a 1955 article in the Observer newspaper in the UK, written by the priest and anti-apartheid campaigner Trevor Huddleston and headlined "For God's sake, wake up!" His warning of what apartheid laws would mean for education inspired Essex teacher Michael Stern to emigrate to South Africa.

He became head of a black school in Johannesburg but it was shut down and he was appointed head of a white school. Frustrated, Stern went on a work-camp in neighbouring Swaziland, then a British protectorate, and came up with the idea of a secondary school for all races or, as he put it, "a happy human mixture".

Martin Kenyon, 83, Waterford's longest-serving trustee in London, attended the weekend celebrations and recalled: "Michael was a very old-fashioned English schoolmaster. He came to me and slept on my floor and was looking for the great and the good to help."

Benefactors soon included Harry Oppenheimer, head of Anglo American, Lady Dorothy Macmillan, wife of the prime minister Harold, the dean of Westminster and actor and director Richard Attenborough, whose decades of support include the Sheila and Richard Attenborough fine art centre on campus.

The school opened in 1963 on part of what had been Waterford farm, owned by Irish immigrants, high on a hill overlooking the capital, Mbabane. Another supporter was the Swazi king Sobhuza II who would rename it Waterford Kamhlaba ("of the earth") There were 16 boys and a basic curriculum including English, maths, science, history, geography, a choice of languages – Afrikaans, Zulu, Latin, French, Portuguese – divinity, art, woodwork, forestry, engineering and music.

Nelson Mandela, left, and Walter Sisulu on Robben Island in 1966. The activists' children are former Waterford students. Photograph: Getty

It was a revolutionary act under the nose of the white-minority regime. Kenyon, who lives in Stockwell in London added: "Michael said it was unnatural for people to be divided by the colour of their skins. It was a huge statement. It was kicking against bricks just over the border. A lot of students couldn't go home because South Africa assumed Michael was a communist."

School lore, passed down successions of teachers and students, has it that the apartheid government sent spies masquerading as parents to the campus and believed that radio masts on a nearby hill were being used to send secret messages to Moscow.

Bruce Wells, the acting headteacher, who as a boy went to a "coloured" school in South Africa, said: "Waterford was very brave and bold. It was a very provocative thing to do at the time, showing a finger to the South African authorities."

In the past half century, nearly 5,000 students have passed through the school, including Ian Khama, the president of Botswana, Richard E Grant, the actor, Matthew Parris, the British MP turned journalist, and Mandela's grandson Mandla. Prince Charles came in 1987, while Khama and the king of Swaziland have visited to mark the 50th anniversary.

Today the school has 600 students from 50 countries and 55 academic staff from 20 countries; 80% of the student body is African and 30% from Swaziland. Fees range from 49,000 to 130,000 emalangeni (£3,477 to £9,224). Nearly a third of students receive bursaries, meaning that children from townships and refugee camps rub shoulders with the sons and daughters of royalty, diplomats and tycoons. Many go on to prestigious US universities.

Waterford's mission has broadened from opposition to apartheid to concerns around economic inequality and international dialogue. It is part of the United World Colleges movement.

"I'd never hung out with a Muslim or atheist before," said Zimbabwean Dalumuzi Mhlanga, 24, who after leaving the school went to Harvard University in America and is bound for Oxford. "I'd never gone to school with a white person. Your world view changes. There is so much that everyone brings to the table."

Ruddy Paluku Ndina, 18, spent years in a refugee camp in Swaziland after fleeing conflict in Goma in eastern Democratic Republic of the Congo. He secured a scholarship at Waterford and is about to study at university in Canada. "It does hurt knowing that you're from a background where you don't have much," he reflected. "But most of my friends didn't know I was a refugee. The school also does a good job of hiding the disparity between rich and poor. They did things to make me fit in."

Although students undertake community service projects, this idyllic and idealistic microcosm can seem remote above an impoverished, HIV-hit nation, the last absolute monarchy in Africa. The recent visit of King Mswati III generated healthy debate among staff and students, with some arguing that more should be done to welcome him, while others questioned whether such an undemocratic figure should be invited at all.

One member of staff said: "I think the school hasn't worked out its relationship with the king. As we are guests in this country, we can't really push against the system too much."

Walking a diplomatic tightrope, acting headteacher Wells explained: "We've always viewed our position as guests of this country at the invitation of the royal family. While we may disagree with some of the policies of the country, we find it difficult to be vocal about it. We change the world by providing better education to children.

"There has been debate that we should leave this country but we also feel that we would be letting down Swaziland."

One man missing from the 50th anniversary events was Stern, who died in a car accident in Britain in 2002 aged 80. In an article for the Swaziland Recorder in 1963, he wrote: "We are trying to prove nothing except that there is nothing to prove. At the worst we shall find it as difficult as starting any new school anywhere; at the best we shall have made our small contribution to better human understanding in southern Africa."